Question

1. Holly, Inc. has sales of $292,510, total assets of $420,400, a debt-equity ratio of 1.2, and a profit margin of 7.5 percent. What is the equity multiplier?

   		1.6
   		2.6
   		1.2
   		2.2

2. Thyme, Inc. has total assets of $72,000, a debt-equity ratio of 0.8, and net income of $7,700. What is the return on equity?

   		27.78 percent
   		24.14 percent
   		22.56 percent
   		19.25 percent

3. Ferns, Inc. paid $14,000 in dividends and $10,300 in interest over the past year. Sales totaled $139,700 with costs of $100,400. The depreciation expense was $10,500. The applicable tax rate is 21 percent. What is the amount of the operating cash flow?

   		$37,650
   		$33,440
   		$31,150
   		$35,415

4. A firm has adopted a policy whereby it will not seek any additional external financing. Given this, what is the maximum growth rate of the firm if it has net income of $12,000, total equity of $40,000, total assets of $80,000, and a 40 percent dividend payout ratio?

   		11.70 percent
   		9.89 percent
   		7.17 percent
   		13.13 percent

5. A firm has cash of $530, accounts receivable of $400, inventory of $1,200, net fixed assets of $1,800, long-term debt of $700, and total equity of $2,330. What is the common-size percentage for the net fixed assets?

   		45.80 percent
   		52.15 percent
   		28.61 percent
   		34.73 percent

Answer 1

1.
=1+Debt/Equity ratio
=1+1.2=2.2

2.
=Net Income/(Total Assets/(1+Debt/Equity ratio))
=7700/(72000/(1+0.8))=19.25%

3.
=(139700-100400-10500)*(1-21%)+10500+10300*21%=35415.00

4.
=12000/80000*(1-40%)/(1-12000/80000*(1-40%))=9.89011%

5.
=Net Fixed Assets/Total Assets
=1800/(1800+530+400+1200)=45.8015267175573%